Ushering in a Golden Age of CPG Loyalty

Chris Mclaren, VP-Marketing, Aimia ISS and David Buckingham, President US, Aimia ISS
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Chris Mclaren, VP-Marketing, Aimia ISS

CPG has always been a fairly hard target for loyalty marketing: CPGs traditionally found mass media to be the easiest and simplest way to impact sales, customers seemed less likely to find typical loyalty value propositions compelling enough to merit program enrollment, and CPGs have tended to see the challenges associated with building an effective loyalty initiative too tough to tackle.

However, these barriers are disappearing in the face of technological change-and the massive related changes in consumer behavior. Advanced CPG brands are now well along in building competitive advantage through loyalty.

The profound changes driving this sea change are many. A few highlights By 2020, Amazon may be many CPGs’ largest retail customer.

If busy customers continue to shift their buying activities to digital, CPGs will increasingly find themselves expected to do more than just offer products through these newer purchase mediums. Differentiated CPG brands must also provide personalized offers and experience-enhancing content.

  ​At its heart, loyalty has always been about obtaining customer information, and in exchange, delivering a better experience 

Information has never been more readily available to consumers seeking to make a CPG buying decision.

Technology has made information omnipresent to consumers, and consumers today are using it to inform buying decisions across an ever-wider array of CPG purchases.

There are now many CPGs showing how loyalty can work.

Brands such as Nike, Adidas, Coca-Cola, Kellogg’s, and even smaller CPG brands like Purell-are today employing loyalty to augment their core product value propositions and build stronger, sustainable connections with consumers.David Buckingham, President US, Aimia ISS

Conquering Big Data is now a strategic imperative.

We live in an age in which most CPGs are data rich, but insight poor. Data is coming in an ever increasing array of formats, making integration and customer insight increasingly difficult.

Meanwhile, customers increasingly demand a positive, personalized, and consistent experience from all the brands they choose and are more empowered than ever to let you—and their hundreds or thousands of contacts—know in real-time when things aren’t just right. “We have never operated in a more data-rich world,” says Umang Shah, Director, Global Social Media & Digital Marketing at Campbell Soup Company. “In fact, the biggest challenge we now have is not to collect the data, but rather to rationalize and find meaningful uses for it. The most meaningful use is to better understand our consumers and provide value to them at every step of the consumer journey-on their terms, not ours.

All these trends points to an emerging “Golden Age” for loyalty in the world of CPG. Why? Because loyalty is the ideal paradigm through which to view and form a response to these trends–better than paradigms like CRM, advertising, or direct marketing. The core difference is that loyalty marketers have always seen the world through the lens of customer data and are thus much better positioned to help CIOs and CMOs overcome its challenges and deliver on its promise. At its heart, loyalty has always been about obtaining customer information, and in exchange, delivering a better experience.

These simple core benefits:
Shift-Acquire new customers
Lift-Increase the spending of existing customers
Retain-Reduce the turnover rate of customers
Profit-Shift customer spending to higher-margin products

Form the basis of every loyalty program ever created. But what has recently unlocked loyalty outcomes for CPGs is technological advancement. Cloud computing, mobile technology, and state-of-the-art loyalty platforms today give CPGs unprecedented power to harness customer insights and deliver personalized, relevant offers and experiences at the right time and place, through channel(s) of the customer’s own choosing. Data-driven loyalty programs, social media scoring and monitoring, advanced analytics, and robust campaign management platforms are now at a maturity level sufficient to enable CPGs to maintain economical one-to-one relationships with each and every one of their customers. “There are fewer constraints than ever for our brands to have direct relationships with the consumer,” says Brian Broveleit, Kellogg’s Director, Global Digital Strategy. “Technology truly changes the game for CPGs who need to appeal to and motivate mass audiences, enabling-and increasingly requiring - us to deliver content that resonates at the individual level.” For CIOs and CMOs, loyalty seems to be an area of common interest. According to Accenture, more than half of CMOs and two-thirds of CIOs said they are prepared to pursue digital marketing opportunities and more than half of respondents on both sides ranked marketing IT as one of their top priorities. However, technology is only as useful as the collective hand that wields it. All too often, CIOs and CMOs find the challenge of effective collaboration quite difficult to manage. While both are coming around to the idea that they need to partner better, when it comes to how to execute, they don’t typically see eye-to-eye. The traditional CIO is concerned with efficiency, deliverability and security. Conversely, the CMO feels speed and customer experience is critical because he or she must market-and obtain market outcomes-quickly. The relationship between CMO and CIOs is thus often fraught with tension. That said the need for collaboration has become increasingly critical. CMOs have had to become more and more reliant on CIOs to solve for loyalty from a technical standpoint. At the same time, CMOs are getting more control over tech budgets. These shifts in responsibility, coupled with the fact that most loyalty technology is now consumer-facing, makes strategizing, implementing, and maintaining loyalty initiatives important to both CMO and CIO-offering a unique opportunity for both to collaborate to accomplish the goal. So how should it happen? In general, CMOs are best suited to own loyalty strategy, implementation, and maintenance, with CIOs advising them-helping vet and implement technology, but also with finding the “sweetspot” between go-to-market speed and efficiency, deliverability, and security. From our experience, CMO and CIO collaborations of this kind position loyalty for maximum success. It’s not always easy, but today’s loyalty opportunities offer CMOs and CIOs a unique chance to collaborate to unlock true business transformation, employing the latest technologies to establish stronger and more sustainable connections between brand and consumer. The time to start is now.

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